Well, there's also the fact that California only gets 79 cents back for every dollar it pays in to the Federal government. . So even with a bailout of some sort, you would still be taking California's taxes. Especially if you live in DC -- $6.64 back from the Federal government for each dollar paid in.

I guess I can't really quarrel that much with the post, though. But it's a fucked up situation. Has been for years, and now it's reaching some sort of culmination.

It's too late for me to do much math, but I read that report you linked to and a lot of the difference comes from the fact that CA has a younger population so per capital SS and Medicare is lower. Much of the rest of the difference comes from having a progressive income tax and CA residents have higher incomes.

Touché.

Still, if the elected officials of California won't be grownups and run their damn state, they shouldn't be rewarded for it. They should have to face up to the economic realities.

Honestly, if I didn't think we'd drag the rest of the country down with us, I'd agree with you, Becks. But as it is, we really are too big to fail*. In the meantime, the state is hellbent on enacting an anti-stimulus plan, whereby lots and lots of people will see their salaries cut in one way or another. Including me, I'm told, but we'll just see about that: when historians have low morale, everyone suffers. See? I showed them.

* Or something.

3: Were you as worried about moral hazard with the other bailouts? I honestly don't remember and would be very interested to know (but will not, under any circumstances, be checking the archives -- because checking archives is my day job).

The majesty of the implicit argument in 5 is that literally everyone in the world is more deserving of a bailout than the people who got bailed out.

It is clear that California's experiment in democracy has failed. The federal government should bail them out, and take over their major governmental functions. California could be like Iraq, or the Navajo Nation - a sort of Trust Territory. Wards of the nation. Not permitted to handle their own finances. Nothing done without the approval of the Secretary of the Interior.

My arguments are nothing if not majestic, Walt. Especially when they're implicit. And you should hear my rhymes.

But as it is, we really are too big to fail

As an East Coaster, I'm willing to take my chances on your failure. Maybe that argument would hold more weight with people from Oregon, or Arizona or something.

7: My own bristly feelings towards California coming looking for money are no doubt colored by the Prop 8 mess. It's an irrational reaction, I realize. But it's there.

4 - My dad's (public research) university is threatening to make all professors teach 4-4 (while still publishing and advising and serving on committees, of course) to save money, which would be a big salary cut for him, too, because there's no way he'd have time to do outside consulting anymore or write books.

5 - I was worried about the moral hazard of the other bailouts but think the hazard of this one is worse. The potential for disaster if people keep thinking they can get far more government than they're willing to pay for is much larger than something confined to one sector of our economy that we can (hopefully) improve transparency of and reduce risk in through regulation.

7: That's pretty much Pittsburgh's situation relative to the state of PA. Been like that for five years and they're almost certain to renew it.

Actually, a sufficiently big blow-up in California could easily torpedo the entire US economy.

Maybe that argument would hold more weight with people from Oregon

Not this one. As a New Englander in exile, I scoff at the idiocy of a system that encourages the electorate to exacerbate, if not create, budget crises. Happens here too. As an Oregonian, I feel schadenfreude mixed with concern for the security of our southern border.

Meh, I don't actually think it would be that bad. They default on their loans, a bunch of municipal bond holders get screwed. But holders of all types of securities have been screwed in the past year, so I don't think it would resonate.

The unemployment spike in California as state workers get laid off would not be good, but not as bad on a national scale as, say, the collapse of Michigan's industrial economy.

So yeah, it would be bad. But we've had worse.

There is no way that the moral hazard of bailing out California can be worse than the moral hazard of bailing out the very institutions that have just destroyed the world economy. You'd have to bail out Magneto to top that level of moral hazard.

The real argument for not bailing out California is that their governmental system is hopelessly broken, and Californians have got to do something to fix it.

(The actual operating argument for not bailing out California is probably that of 9, since the sense of that we're all in this together has now completely eroded in the United States, except among the rich, and the rich pretty much only feel it for the rich.)

Still, if the elected officials of California won't be grownups and run their damn state, they shouldn't be rewarded for it. They should have to face up to the economic realities.

The problem, of course, is that the state's ridiculous supermajority requirement for tax raises effectively means that the elected officials *can't* be grownups about it to a certain extent.

(Reading through M/att W/elch's posts on the state's budget crisis reminds me that although a certain segment of libertarians are valuable allies when it comes to foreign policy and civil rights, there are still issues where they make me want to hit something.)

As for the working through furlough issue, it's theft of labor pure and simple. Bring on the lawsuits.

9: Really, if CA finds itself in big enough trouble, you'll feel the pain, too. It's not like an earthquake; the shockwaves will travel beyond Winnemucca.

11.1: Yeah, they're talking about changing teaching loads in addition to cutting salaries. It's a hideous mess, which, in my own back yard, means not signing the younger boy up for (very expensive) swimming lessons, even though I know that if enough people make that decision the swimming lessons people, who run a very good local business, will fail. I've also taken on bunches of extra work that I'd ordinarily turn down, knowing full well that I'm being penny-wise and pound-foolish: more time spent away from writing my book is a Very Bad Thing for my long-term career prospects.

11.2: Given the disproportionate power of bankers in the American economy -- and in American culture more broadly -- I'm not sure I agree. But I've been careful to steer clear of these conversations for the most part, because I have no idea what I'm talking about.

Holders of all types of securities have been screwed in the past year? As a holder of multiple types of securities, I've been impressed by the solicitousness of the government for my welfare.

I'd note that I've been pwned, but I'm sure someone will beat me to it. That said, it's probably worth noting that you don't seem to have a clue what you're talking about, Spike. I mean, take it from someone who's an expert in not knowing what he's talking about.

Dammit, Walt.

The trouble with the moral hazard of bailing out California is that is a moral hazard with a distinct constituency - Republican state lawmakers. Showing them that refusing to raise revenue through taxes gets you a federal bailout is like throwing red meat to wolves.

23: How about we bail out California, and then send the Republican state lawmakers to the firing squad? That'll mix up the moral hazard.

23: See, I think that's completely wrong. You're misunderestimating the depth of their ideological commitments to lunacy. The equation that you've just completed -- give money to a bunch of petulant thugs and you're encouraging them to behave thuggishly -- suggests that if you don't give them the money, they'll behave better. Well, that's almost certainly wrong when the thugs in question are California Republicans.

21: Maybe I'm just coming off as extraordinarily unsympathetic because I'm extraordinarily unsympathetic. Bottom line is that you Californians need to get your shit together, and telling the rest of us how bad its going to be if you don't isn't going to convince us that we should do it for you.

Yeah, ari. Pass better laws.

25: California Republicans are a lost cause. My concern is Republicans in other states getting ideas.

Or, you know, burn shit down.

I'd like a boolean presented to the people via an election, so at least there's some involvement of the people, but people can't vote on stances that aren't complementary. Californians get to vote on whether to keep the referendum system XOR the 2/3 majority to raise taxes, but not both.

Assuming the bailout of the banks was necessary, the reason it was necessary was because of loans to CA, FL and NV. While the bankers are responsible for that stupidity, California is closer to 'unindicted co-conspirator' than 'innocent victim'.

26: But see, you're not coming off as unsympathetic so much as uninformed. Which isn't to say that I don't share your outrage about my state's enormously stupid politics. Where we part ways is my sense that real people -- and lots of them, many of whom live nowhere near CA -- will suffer if something doesn't change relatively quickly. And thus your cavalier attitude about teaching us a lesson seems wildly misplaced to me. Also, your 28 makes no sense in light of your 23.

32: Also, your 28 makes no sense in light of your 23.

I don't think you are understanding my point in 23... maybe I was too terse. The concern I was expressing is not that California Republicans will act like jackasses and get rewarded, its that Republicans in other states will see California Republicans acting like jackasses and getting rewarded, and will be encouraged to behave in a similar manner.

a lot of the difference comes from the fact that CA has a younger population so per capital SS and Medicare is lower. Much of the rest of the difference comes from having a progressive income tax

ummm, so what? The point still stands.

Still, if the elected officials of California won't be grownups and run their damn state, they shouldn't be rewarded for it.

The elected officials of California will be fine no matter what. It's the poor of California who will be fucked.

Honestly, if I didn't think we'd drag the rest of the country down with us, I'd agree with you, Becks. But as it is, we really are too big to fail

Whether or not California drags the U.S. economy down -- and I don't think it necessarily will, you could get a highly localized depression -- California is too important to let the Californians fuck it up.

But the overall point is the system of government in the state has to change, otherwise we'll be right back here a year or two after any "bailout". And in our federal system we can't do that by central government fiat. The voters of the state do have to learn a lesson and change their own system. If we could somehow ease the impact of that lesson on the people at the bottom of the system, that would be good, but I'm not completely sure how to do it.

It might be a salutory national lesson, actually, as what we are about to see is the logical end point of the no-tax ideology the Republicans have been pushing since the 70s. At the Federal level we could always borrow our way out of it, at the state level you can't.

32: And thus your cavalier attitude about teaching us a lesson seems wildly misplaced to me.

Think of it as altruistic punishment. You're welcome :)

The complaint about working through furloughs and the complaint about California's wanting a bailout (and the rest of the mess in CA) seem independent of one another.

36: Yes. I suppose if you got required to work through a furlough, you could damage a printer or something as an offset.

34: It's hard for me to reconcile the various parts of your comment: people, especially the most vulnerable* people in the state, will suffer if nothing is done; if CA's economy tanks, it will be a huge problem at least for the region and maybe for the nation; and yet, there's really nothing to be done but to allow the carnage to unfold, as Californians have to be taught a lesson**. Well, maybe. But along the way, you're probably going to kill lots of people, ruin many, many more lives, and potentially hamstring the nation's economy. Um, if you say the risk is worth it to avoid the taint of moral hazard, I guess it must be.

* This may be true. In fact, it almost certainly is, as suffering is almost always meted out disproportionately, with the poor suffering the most. But middle-class people will suffer, too.

** Unlike bankers and financiers?

California won't "fail". It will just become a super-size Mississippi -- really bad schools, health care, infrastructure, etc. But it will continue to function. Even the state government will continue to function on a slimmed-down basis.

My uninformed guess based on the strong distance bias in trade is that short-term macro impacts ("dragging the country down to depression") will be less important for the rest of the country than the long-term economic growth effect of a gradual decline in the state as a source of innovation and creativity.

Given that I'm thousands of miles away from CA, and that the hour here is quite late, I'm going to sleep. Good night, all.

"the state as a source of innovation and creativity."

Speaking of, TV sucks lately. California should do something about that.

I should probably sleep also. If CA does go broke, it probably won't be that bad. Pittsburgh's been broke for years and it doesn't seem to have hurt that much, though I'm sure it really sucked at the time.

38: Ari, I wasn't making a moral hazard argument of any kind. I was just saying that the California constitution must be changed in order to solve this problem (in any other way but massive cuts). And under our system the voters of the state are the ones who have to do that.

It would be great to figure out a way to get the voters of the state to change the constitution and also get Federal assistance in there. Perhaps a Federal loan on the condition of a constitutional convention or fundamental changes in the budgeting system, with the two linked on a ballot initiative.

1: Especially if you live in DC -- $6.64 back from the Federal government for each dollar paid in.

Are you seriously quoting the tax revenue/spend ratio for the motherfucking seat of federal government as an argument? Worst rhetorical gambit *EVAH*.

The article about working through a furlough is sort of weird, I didn't think that was really allowed. My brother's chemical plant happens on unpaid furlough this week, and the company has made damn sure that no one is doing any work during this time. Company cell phones had to be turned in, access to the network was shut down, etc., because employers aren't allowed to make employees work without compensation.

I wonder if there's a difference between the private and public sector approaches to this, or if it's just easier to temporarily shut down a manufacturing facility than a "knowledge work"-type job.

Not knowing much, PGD sounds eminently sensible in 43:

It would be great to figure out a way to get the voters of the state to change the constitution and also get Federal assistance in there. Perhaps a Federal loan on the condition of a constitutional convention or fundamental changes in the budgeting system, with the two linked on a ballot initiative.

It would be a hilariously worded ballot initiative, if nothing else.

Especially if you live in DC -- $6.64 back from the Federal government for each dollar paid in.

Yeah, as 44 points out, this doesn't really hold up for DC. Hard to raise enough revenue when the most valuable real estate in the city is exempt from property tax.

43,46: Ignoring the WRGE in 1, yes that sounds interesting.

29: You have a list for max effect? I could get into that after the next thing goes wrong. Given that "articulate" seems to be the one and only real change we can believe in, with the rest being BS.

Hey, it makes perfect sense for people in DC to live on the teat of the Federal government, that's the purpose of the place. But to then turn around and say accuse others of "taking their taxes" is a little rich. So I reject the WRGE accusation.

I mean, there has almost got to be a worse rhetorical gambit made by somebody somewhere.

I ran into the gentleman named in 17 this weekend. He has a cute baby. Unfortunately he didn't remember who I was -- we'd met in a very different context -- and so conversation was thereafter too stilted to get going on the CA budget sitch.

Yeah, without having read a single response on this thread, my initial response is to give a big, hearty, overwhelming fuck you to you, Becks. Seriously, fuck off, or learn more before posting . We pay more in taxes to the feds than we receive back. You, I think, live in DC, basically receiving social services from our money. But the consequence of this kind of bullshit post is that poor people will, in fact, die, in fairly large numbers.

California is constrained by a set of horrible constitutional rules. The state does desperately needs constitutional reform, and it is burdened with a constitution that makes reform difficult to impossible. But poor people are actually about to suffer consequences here the likes of which are overwhelming, and the costs are being born by people earning less than you. Teachers are being laid off. Funding for the most basic kinds of social services are ending. This is a huge problem that is affecting millions of people and will eventually affect and drag down the country as a whole. If we can bail out banks for billions of dollars to either the banks or the auto companies, the feds could pay to help maintain social services to the poor in the country's largest and most important state.

Anyone who doesn't understand this, to my mind, can't walk around and pat themselves on the back for being a liberal. Step up and support poor people in need or just accept the fact that you're not actually a liberal, just a yuppie who doesn't hate gay people. This is an obnoxious post that deserves an obnoxious response.

Alternate proposal: Free and clear bailout of California, but Ronald Reagan is officially named the national "World Historical Douche" and all utterances praising or longing for the return of Reagan will be subject to a tax (for newspapers and television based on readership and viewership).

From Reagan, in his own hand:

Cruel as it may sound, it would be foolish to tap our national resources when no one in the city seems moved to correct the policies which led to its present disastrous plight.

The sad fact is, New York City must face reality and save itself and we'd all better watch and learn.

As I understand it California could get rid of the 2/3 requirement to raise taxes by a simple majority vote of the people. If this is impossible perhaps the state should be required to live with the consequences. This really shouldn't cause undue hardship since according to this California was 10th in state taxes per capita (as of 2005). New York was 11th and isn't exactly destitute. For that matter Colorado is 47th and seems to get by fine.

As California goes, so goes the nation. This is step number, a test of the shock doctrine that will be forced on America. (By Obama, Summers, and Orszag, but leave that for another day.)

It has been Planned for forty years, if not longer. And what Reagan did to California, he did to America ten years later.

Yeah, it is motherfucking tough and ugly. I don't know how it will play out, but I know "moral hazard" will hit the least deserving and capable of bearing the pain. The old, the poor will freaking die.
This will teach Republicans a lesson? They will fucking love it.

I do not want to hear these kinds of arguments here.

53: I think there does need to be some manner of national level bailout of California. But the Washington DC bemoanery is making you guys look like the whiningest whining titty babies in the history of the world. Go live under the motherfucking DC governance plan for a bit

PER CAPITA STATE SPENDING ON HIGHER EDUCATION IN THE DAVIS METROPOLITAN AREA GROSSLY EXCEEDS STATE AVERAGE. MILLIONS OF OUTRAGED LOS ANGELENOS DEMAND TO KNOW WHY!!

Removing the 2/3 requirement isn't possible at all in the next six months, which is when the disastrous cuts will happen. In the interim, people are suffering dramatically.

There will be a push for the 2/3 and other rules to change, but most people in the state, quite understandably, don't understand how screwed they are by this supermajority requirement. They just want their politicians to fix it. I would be 100% supportive of a federal loan conditioned on California raising taxes or changing its tax structure, as would almost all progressives in the state.

57 -- well, speaking for myself, I was only reacting to Becks's "why should I raise my taxes to bail you guys out" which, quite frankly, is sub-Sean Hannity level discourse.

I think DC is a great town and that California, a rich state, should pay a lot in federal taxes. But with the level of crisis we're in, we need federal help to avoid having a lot of poor people suffer a lot. And to bury your head in the sand about that, particularly when you live in DC, is obnoxious.

I love California. I have been there 6-10 times but never was able to get it together. When my life ht rock bottom, I never though of Seattle or NYC or Florida, I wanted the beach and cliffs and fog and people.

I don't know what to do. Democrats don't have enough guns and military training, which is why I want a draft. Hint Hint.

But I wish more people had openly hated Republicans like the vicious killers and genocidal racists they are for the last 3-4 decades I have hated them. Now it may be too late for California, and too late for America.

Haven't really read the thread yet but 1) is Spike being kind of intentionally dumb or what? and 2) wtf is wrong with all the people living in California now passing that law in 1978? I mean, what, fully 30% of the state's current population had to be involved in that.

On the other hand, when Massachusetts noticed that it was paying more to the federal government in taxes than it was receiving, it started a massive, incredibly expensive highway project, so that's another solution.

Incidentally, the 2/3s requirement was actually snuck into the constitution in the context of a bill (Prop. 13) that was ostensibly about something very different. If you'd like to lay this all at somebody's feet, may I heartily suggest Howard Jarvis? The rest all pretty much spilled out from that.

I really need to go to bed but I'd just like to clarify that my belief that people need to have these choices made explicit and need to decide what they're willing to fund comes from an optimistic place.

What's going on now (high-services, low-taxes) is unsustainable. It needs to change for the long term and I think more people now than in the last couple of decades see that government affects (and improves) their daily lives and isn't just a burden siphoning their tax dollars. Part of this is because of the economic downturn and more people as a result needing services (many who thought they never would) and part is people seeing what's changed in their neighborhood and their neighbors lives because of the budget cuts. I would hope this would make the majority of people more willing to pay the bill for the services they want.

The Feds can't just come in and give them a bailout and let them continue with their failed experiment. They have to insist on a restructuring as part of the deal or CA will have the same problem next year and the year after that.

Also, all the people who are like "oh, well, if California doesn't get bailed out, sucks for them, not for me"? You are stupid, people.

The article about working through a furlough is sort of weird, I didn't think that was really allowed.

Depends what kind of a job you have, right? I only know first-hand about academics (this is in AZ, but same situation), but being "furloughed" with the stipulation that you can't take furlough days on days that you teach, and without lessening service or research requirements... that's just a pay cut.

(It's completely possible all these points have been made repeatedly; the piling on just seems fun.)

63: the problems don't have to do with some kind of moral hazard where voters in California think they can have it all. I mean, you want the federal government to take the state into receivership and change exactly one thing about the state constitution? Really? That's the precedent you want? Very, very crazy thinking, there.

62:Anybody follow the link in 56 to Digby's?

Tweety tells the story I had heard, but Digby says it was all Reagan's idea. I guess Reagan failed in the legislature and initiative the first time.

Also, to clarify, I'd support bailing out California if a restructuring came with the deal. I've worked in state government before and know that many of them need help with shortfalls and that that's an effective stimulus. I'm against the idea that we'd just give California money without them having a structure in place that would suggest they could balance their budget without help in the future. That would be like (to violate the analogy ban) throwing money at Detroit without a business plan for how they'll get back into the black.

I just wanted to quote both of these:

Step up and support poor people in need or just accept the fact that you're not actually a liberal, just a yuppie who doesn't hate gay people.

and

As for the working through furlough issue, it's theft of labor pure and simple. Bring on the lawsuits.

Which apply generally, in California or elsewhere.

Damn, It's late and I can't remember where I rea it. but somebody wrote that Obama's plan is to wait until what happens in California gets so horrible that no other state will get ideas, then bail them out, with conditions.

And I'm off to swim bed.

68: well, who knows. Jarvis was the face of the "tax revolt" (and even got that cameo in Airplane!) but as far as who inserted the 2/3s language, I've never really heard a convincing explanation.

Certainly I don't exactly think anybody had exactly this situation in mind, but part of the story of the present is that California was the leader in a very (nationally! Progressively!) popular move towards direct democracy and the fact that residents of other states -- which states were following close behind but didn't quite reach this impasse as quickly as California did -- are now congratulating themselves on their foresight for failing to fuck up as quickly as Cali is a vast overestimate of their own agency. There are 49 states in this country that are basically lucky California got there first, I wager.

Also the idea that states should necessary operate "in the black" is pretty wildly pernicious. We would be in a much better place, stimulus-wise, if so many states didn't have balanced budget amendments.

71:It was

Ezra Klein

And the federal government isn't going to let the largest state in the union actually fail. But if federal money proves necessary, Washington is going to make sure that it's such an agonizing experience that no other state would ever voluntarily follow in California's footsteps.

It is clear that California's experiment in democracy has failed. The federal government should bail them out, and take over their major governmental functions. California could be like Iraq, or the Navajo Nation - a sort of Trust Territory. Wards of the nation. Not permitted to handle their own finances. Nothing done without the approval of the Secretary of the Interior.

Please not the Bureau of Indian Affairs or Mineral Management Service. Just not them, OK?

the problems don't have to do with some kind of moral hazard where voters in California think they can have it all.

They do, though. The effect of Prop 13 on property taxes is wildly popular. The 2/3rd majority to raise taxes is also broadly popular. And the various ballot measures allocating lots of money to education, prisons, and the like are very popular too. When politicians run on a platform of raising taxes and cutting spending to bring them into balance, they lose to politicians who say (falsely!) that we can have it all.

Tweety tells the story I had heard, but Digby says it was all Reagan's idea.

I have firsthand knowledge that the maximum income tax rate in California is much higher than 7.5% or 8%. Whatever Digby is talking about Reagan trying, didn't end up happening.

71: A number of people have written a number of interesting things about Obama's plans, bob.

I get the sense that people may not understand how bad things are. Here is a link to a pretty good story on the effect of the current budget crisis on the poor. The current plan for budget cuts includes:

-- Complete elimination of the state's entire welfare plan.

-- Complete elimination of the state's health insurance plan for poor families and poor children

-- All state grants for college to poor and middle income Californians

-- Drastic cuts in the most basic social services provided by California cities.

-- Incredibly deep cuts to an already overburdened education system. Mass layoffs in already underperforming schools.

More than 1 million poor children in the state would lose their health care, immediately. All in a climate with massive rates of unemployment and foreclosures. It is not even close to an exaggeration to say that poor people will die from these cuts, and soon.

Why is the budget being balanced on the back of the poor? In part for political reasons, and in part because it's one of the few funding sources not governed by specific bond monies or funds from a proposition.

If the feds refuse to provide money for a bailout, the rich and upper middle class will be affected, but not dramatically. A failure of federal assistance far more likely to make poor people suffer than to produce some kind of structural reform of the state constitution.

That's why Beck's argument is so wrong. This isn't a question of people needing to be taught a "lesson" to live within their means. Californians are no less (and no more) capable of balancing their wants and taxation needs than people in any other state. They are burdened by a constitutional system that's become batshit insane, but that it's very difficult to change all at once. Things are changing, but in the meantime, people need help. Seriously.

Pwned by your 75, but I'll note that Klein's "Washington" is not synonymous with your "Obama".

As an addenda to 79, it's not like the politicians that are being most recalcitrant would be hurt by this, either. You could probably ignite a populist groundswell against reliably progressive urban Democrats, while keeping the rural and exurban GOP power center completely intact. That's just what California needs. Another allegedly moderate GOP insurgency.

Also the idea that states should necessary operate "in the black" is pretty wildly pernicious. We would be in a much better place, stimulus-wise, if so many states didn't have balanced budget amendments.

Possibly so. We'd also be in a better place if the state didn't react to a large temporary spike in income tax receipts due to the dot-com boom by enshrining a bunch of long-lived programs that acted as if that spike was the new normal.

Also, to clarify, I'd support bailing out California if a restructuring came with the deal.

Shit, I'd support a restructuring even if it didn't come with a bailout. The erratic governor doesn't help, but we do have (some) good legislators. If they weren't so hamstrung by the accumulation of rules like designated funds and the supermajority requirement for raising taxes, I believe they could come up budget that would let us work our way into the black again. Californians don't actually hate taxes; they've never seen a bond they haven't voted for. But our terrible system is snarled into deadlock.

82: well, sure. And we'd be way better off if the state country didn't act insane, ever increasing housing prices were the way things had to be. As goes California...

RH, I'm sure the people you're responding to already know the objections you're making - they wouldn't have been so arrogant as to make prescriptions with no facts to hand. They just have no respect for human life.

Do I have to link to the multiple times recently Obama has said:"We have no money."

And today Obama is going to sign the supplemental?

It's also important to talk about what we actually mean when we're talking about the federal government "bailing out" California. We're talking about the federal government issuing loan guarantees so that the state can finance its services in the bond market.

California has unbelievable resources and has never (and probably will never) default on its debt. So the realistic need for those guarantees to be called upon is vanishingly low. But the current fiscal crisis, combined with the financial crisis, has made it difficult or impossible for the state to finance its ongoing operations on the private market in the same way that it ordinarily would. That's what's driving the immediate crisis and all the state is asking for are loan guarantees that, in all likelihood, would never, ever have to be called upon. That Washington is unwilling to do that speaks to its priorities (and also to the ineffectiveness of the CA congressional delegation, and to the fact that California is now seen as a safe Democratic state, and therefore disposable for Obama).

77 - Do you have cites for those? I'd believe a reliable poll, but in my (self-selected) circles, Prop 13 is widely reviled. My cohort bought our houses later, you see, and hate those fuckers next door who pay $17/year in property taxes. Also, we would like to send our kids to decent schools. The folks who did well by Prop 13 are aging out.

Do you have cites for those?

Here.

But the current fiscal crisis, combined with the financial crisis, has made it difficult or impossible for the state to finance its ongoing operations on the private market in the same way that it ordinarily would.

Is there any indication that California can't borrow money? Or is it just that barring some sign of progress toward a more sane budget environment, we'd have to pay a higher interest rate than we want to?

Incidentally, I personally think that Prop 218 (also courtesy of the Howard Jarvis Tax Foundation) has the potential to be a bigger destructive force than Prop 13 is. Virtually everything we propose to do to secure our water supply and clean up waste will be subject to Prop. 218 and the requirement for public approval will stop or slow infrastructure development. It is going to be very, very bad as all the shitter plants built in the 60's fail in the next decade or so and we can't raise monies to build new ones. The supply side problems are just as bad.

I regularly curse Howard Jarvis.

217 -- The state can, for the most part, get money at some interest rate in the bond market, but if the rate is punishingly high, that requires dramatic budget cuts. We're talking about short-term loans -- the state finances itself using short-term loans during the period between when it needs to spend money out and collect money in taxes. If the state has to pay punishingly high interest rates on those short-term loans, higher borrowing costs drive budget cuts. All the state is asking the feds to do is to guarantee those short term loans so as to lower the rates on short-term borrowing to a point where the budget is sustainable.

Thanks, water moccasin. This was a nice summary. My friends are not typical.

***

Well, back in Jan and Feb when we told all our grantees and contractors to stop work, the rumor I heard was that the interest rates we would have to pay are forty times higher than we typically pay. I can't say how reliable that rumor was. We were able to sell bonds the last time they were offered, so if any of the do-gooder groups we shafted still exist after months with no funding, they might see some of their invoices paid eventually.

Um, 91 to 89.

And, I'll see your 70 and raise you "Raise your own fucking taxes instead of taking mine." I don't think Becks' post was that ill-intentioned, but the combination of ignorance about the situation and basic unthinking Republicanism is extremely annoying, at least to me.

This guy, who I read regularly, says that the state will have no problem borrowing money.

Even the most minimal amount of investigation would show that "40 times the interest rate we normally pay" is bullshit.

I'm not much of one for heightening-the-contradictions arguments, but California seems to be in a massive state of denial about its finances, and I don't see that changing until it has to, so in my book the sooner that day comes the better.

Um, the guy you cite to in 94 reaches the exact opposite of the conclusion you suggest. Or, more precisely, he says that the state will be able to pay off its creditors (which it has to do, and he points out state constitutional requirements that make that even more likely to be the case in CA than other states) but he points out that schools, hospitals, etc., will have to be closed in order to do so, and that California would be better off defaulting (which, constitutionally, it can't do).

Again, California isn't in a "massive state of denial" -- or any more so than anywhere else. True, it has a bunch of Republican idiots, but so does everywhere else. The big problem is its Constitutional and budgetary structure. The idea that denying federal loan guarantees -- which is what we're talking about here -- will force that constitutional change is extraordinarily improbable; the far more likely result is that things muddle on, but that poor people especially, and the economy in general, suffer.

I'm pretty sure I'm remembering the rumor accurately and it was right before the most recent (2008) budget was passed seven months late. At that time, it wasn't clear we'd get any budget, even the one that got shot down by the recent propositions. I can't say how good the rumor was, but the comptroller refused to sell bonds at the rate he'd have to offer.

I think that with the reasonable belief that CA could pass a budget, bonds would sell. But I'm not sure why anyone would have a reasonable belief that CA could pass a budget.

The linked article says that the state will have no problem borrowing money, so why are loan guarantees needed?

96 --- The problem isn't really whether bonds will sell, it's whether they can only sell at a rate that forces massive, massive cuts to the budget, particularly the general fund (which, IIRC, your agency isn't financed out of? could be wrong about that).

No, the article doesn't say that the state will have no problem borrowing. It says that the state will be able to pay back its borrowing costs, but that to do so it can and will have to dramatically slash social services, which is why the author recommends a default (which won't happen, but still)

The federal loan guarantees are necessary to prevent the financing costs that will cause the massive cuts in social services from the state's general fund -- that's why they are necessary, and why they would help to protect the poor.

WTF, state?

I'm pretty sure I'm remembering the rumor accurately and it was right before the most recent (2008) budget was passed seven months late.

Even during the boom times, California GO bonds were yielding a couple percent. Forty times that is 80% interest, which is well into loan shark territory. All of the hand-wringing we are seeing now is because California might have to pay 8 or possibly 10%.

Yeah, who exactly do you think is in a massive state of denial about its finances? People in the past who voted us into this situation piecemeal on confusing ballot measures? People in the past are in denial when asked about having this piece of attractive cake and asked another time about eating it too? It really is true that our system allows voters to go badly astray and that should change. But if you ask them on any one occasion if they want this deeply fucked up system and the results we're facing, they'd say no.

I want this system cleaned up and fixed as fervently as anyone you'll meet. But forcing the kind of pain this is going to bring on the poorest (and in my field, the voiceless environment) is a harsh way to do it.

98 - Yep. We're squarely mixed up in this. Whether you'd rather be funded from the General Fund or bonds is a fun game for agency staff to play. The answer changes day by day!

Also, I can speak to Beck's point on furloughs. I genuinely don't work when I take my furlough days. But I can assure you that my workload and the expectations on my department have not decreased by 10%. The delivery timelines are not 10% later.

101 may be right (I'm not sure about the exact interest rate CA can get right now) but that kind of increase means that, as I said above, more than 1 milllion children will be immediately deprived of all of their health care coverage.

If you're buying the theory that the feds could fix the "massive state of denial" by not providing loan guarantees, consider this: except for Arnold, who's not really a Republican anymore, every Republican politician in the state wants the federal government to deny the loan guarantees. Why? Because they've made the (undoubtedly correct) political calculation that having a completely fucked budget will benefit them, by putting the Democrats in trouble, without hurting their wealthier constituents too much. They don't think that denying federal loan guarantees would produce a constitutional reform to eliminate Prop 13 or the 2/3 rule. In fact, they think that denying those guarantees will help get them into power and help protect both Prop 13 and the 2/3 rule. So why are you on the side of those Republicans?

You can't sue a state, can you? So the labor lawsuits over furloughs are out.

Wow... there are long-term CA bonds out there trading at interest rates that are in the ballpark of my mortgage. That is insane.

I don't understand the argument that a bailout of California would encourage Republicans. Republicans would vote against that bailout. They're more interested in a default leading to a federal judge making injunctions requiring cuts.

But if you ask them on any one occasion if they want this deeply fucked up system and the results we're facing, they'd say no.

There was a very low sample size poll done by UC Riverside recently where Californians were asked who they blamed more for the crisis, the Governor or the Legislature? (I think the Legislature lost that one.) The idea of including the initiative system and by implication the voters in the question never crossed the minds of the survey takers, apparently.

Another question asked if the budget should be in the hands of the Governor and Legislature only, or if direct democracy should continue to play a role in the budget system. And what do you know, the respondents favored keeping the direct democracy.

What we have is a total failure of civic education.

But will this motel be standing, until I pay my bill?

We're going to sell the state bird. Those eagles are rare and should bring a good return.

107 gets it right (well, I don't think there would be a federal judge with injunctions, but the Republicans want a crisis that leads to cuts). The Republicans in the state, who are the ones who love Prop 13 and love the 2/3 rule, don't want a bailout, because they think it will benefit them. The idea that refusing to "bail out" California (i.e., issue loan guarantees) will somehow lead to a reform of the state constitution is, simply put, insane.

I think that there could be room for a loan guarantee coupled with some conditions that would require a tax increase or other fiscal reform. But the Obama administration has shown zero interest in a plan that looks like that.

Injunction and default may not be the correct terms, but Tom Campbell sees this as one possible scenario:

3-Dysfunctional partisan "stalemate" returns, the Legislature is unable to pass a budget, and the state starts missing payments on its bills sometime in July. At that point, he believes, some unpaid vendor or vendors would file a class action suit and the state would find itself in court being ordered by some federal judge (Article 1, Section 10 of the U.S. Constitution prohibits states from defaulting, Campbell helpfully pointed out) to sell off assets and take other actions to pay the bills. The candidate said he sees this as "the most likely outcome."

It doesn't look like Campbell wants that to happen. He even talks about raising gas taxes. Unlikely he'd get through a primary, I guess.

105: Sure you can, if it lets you (statutorily). Our state employee unions here just filed lawsuits against the Governor's furlough plans. They may lose, but if they do it will be because the courts conclude that the Gov has authority to do what she's doing, not because of sovereign immunity.

99: Almost like those GO bonds really are general obligations of the state, secured by its taxing power. The Washington Supreme Court managed to renege on the WPPSS bonds a couple of decades ago, but mostly that doesn't happen.

Besides all this, what specific routes do you foresee for "getting our act together" and "acting like grown-ups" and "fixing our shit"?

Specific. Like what, exactly? Because my knowledgeable friends and I play this game all the time.

We have a Const. requirement that requires a 2/3rds majority pass a budget that raises taxes. That comes down to three Republican votes in the Senate, which we will NEVER GET. Districts are pretty polarized here and every Republican that approves a budget gets voted out and replaced from the right. The three who compromised on a very Republican budget in spring have been pilloried by the Republicans. They're goners.

So we will NEVER get a reasonable budget under our current fucked up Constitution. That option is out.

What else?

Senate majority leader Steinburg proposed a likely illegal tricksy budget that called taxes "fees" or something and said if it was revenue neutral overall, it didn't require 2/3rds. But the governor shot it down. That would have been instantly litigated, but at least it was interesting and a better prospect than our current budget.

Or,

We could revise the Constitution, which would be fucking excellent and I desperately want. Requires the Leg to call for it, but the same Republicans wont do that.

Or,

We could call a Const. Convention through the popular ballot, which we're working on. That'll be in 2010. That's great. Who knows? Maybe the freakish longshot of a Const. Convention will help us in a couple years.

Or,

My boss suggested something that I haven't heard anywhere else, which is to start impeaching Republican legislators on the grounds that they aren't legislating. That isn't likely either, but perhaps that would change their assessment of self-interest.

Or...

Or nothing. I don't know anything else and haven't heard any other suggestions for any other routes to Get Our Acts Together. What? A special election + redistricting to replace all legislators?

An outside intervention like the Feds stepping in would be GREAT. The best legal route to fix this is a Constitutional Convention or a ballot measure to get rid of 2/3rds in 2010. But our next budget is due in three weeks. Telling us to Fix This Shit Like Grown-ups doesn't help unless you tell me exactly HOW. Don't say "Make cuts" unless you mean the type of stuff Halford is describing. That's what is at stake.

114 is really great.

As Megan says, it's important to understand that the only possible long term fix would be a constitutional convention that can't happen until 2010 at the earliest, with reform happening after that, but the budget crisis is happening right now.

not because of sovereign immunity.

Ah, right. I was confused over the whole diversity question.

Also, I just want to say Mello-Roos.

How about we just raise federal income tax rates on the top half of the income distribution, give or take, and distribute the proceeds to the states by population. Then ramp the amounts up over time and let the states phase their income tax systems down. Don't just bail out one state, bail them all out.

Except that Republicans in the Senate would fuck that up as surely as the California Leg.

So I'm OK with bailing out California, even if it is pretty unbelievable that one of the richest, best educated states in the country manages to run an even more dysfunctional government than our little banana republic out here in the middle of the ocean.

Proposition 13 could be repealed or modified via ballot measure, if you could get the people to vote for it. Which they would, if they thought it was doing them more harm than good.

It's politics, which traditionally requires getting people to come to your side. Making the other side illegal can seem appealing, but rarely works.

How 'bout if you just go all mcmanus on their ass?

The problem is, shit burns itself down and then they cut the budget for for fire prevention measures.

Thanks. But I don't mean to apply this analysis to a long term fix. When I talk about this with people who know more than I do, they shake their head when I ask for ANY game plan for this upcoming budget. There is no solution space within our current rules, even for well-intentioned smart people. ('Cept catastrophic hurt for people poorer than me.)

(I suppose another option is that the Census could be adequate cover for changing the number of districts so that Dems reach 2/3rds with no Republicans. But again, that is two or three years out.)

By the way, when I move out of the country to be a student elsewhere, that means I only get to vote in federal elections, right? (No absentee vote for California.)

How about invading and conquering Texas? They have oil. Also Alberta.

123: Don't know for sure, but I think as long as you haven't changed your domicile (basically, you're in the new place temporarily and don't intend to stay) you'd still be able to vote in state elections.

Anyway, my deeply pessimistic feeling is that there will be some catastrophe directly related to state finances - some infrastructure collapse, or something like that - that gets a lot of publicity before enough votes change on the state's political structure. Sadly, awareness of people suffering individually or as families in many different parts of the state will probably not be high enough to change enough minds. This is a really depressing thought.

one of the richest, best educated states in the country

You know, we are and we shouldn't need a handout for any length of time. But it is good to remember that we have very large poor populations here. We're very rich and very poor both.

Well, eb, the governor has already announced that we won't be reimbursing locals for firefighting this year. Vast fires might be too normal to sway votes, though.

118-- In terms of the civic culture of its bureaucrats, agencies, court system and the like, I believe that California state government is actually still very good. We all know about our superstar blogging water bureaucrats, but I am also often very, very impressed with the California state courts (I know for a fact that we have a way, way better system than NY or Illinois), and the same holds true IME for many of the other agencies. And, of course, the state universities.

Our problem is in our state constituion, which ironically is a product of the same progressive-era spirit that produced our good universities, courts, and bureaucracies. Or, more precisely, the problem lies in the intersection of a bad state constitution and a crazy Republican minority. That constitution needs to be changed, but it can only be done through a convention that won't happen until at least a year from now, at which point the budget disaster will have gotten far worse. And, in the meantime, the budget disaster is only helping the crazy Republican minority.

129: Yeah, I was too flippant. Still, it might be worth planting some bananas on the Capitol grounds to sell at the farmers' market. Might make enough to pay a water bureaucrat or two.

That constitution needs to be changed, but it can only be done through a convention that won't happen until at least a year from now, at which point the budget disaster will have gotten far worse.

All it would take to repeal Proposition 13 is paying someone to get enough signatures to get it on the ballot (easy) and getting 50% + 1 of the state population to vote for it.

Actually, at this point, repealing Prop 13 wouldn't do much to solve the crisis, not to mention that it's politically untenable (and is getting yet more untenable because of the crisis).

Completely off topic, but what exactly is a "contemporary kitchenette"? Searching suggests that it includes some small stove-like appliance - a couple of burners - but it's not clear.

A sink and a hot plate, with carbon offsets.

I dunno, 28 billion (or whatever) seems like a small price to pay to be able to call all of California a bunch of deadbeats. I say it's worth it.

The problem isn't one of principle. It's the lack of options. Basically the choice the Feds face is giving California money essentially unconditionally, or not giving them at all. There's no way to attach reform conditions to the money (as was done with Pittsburgh, New York or New Orleans). We can't reduce California to the status of a territory, appoint a new government, then tell it what it needs to do to be readmitted to the union -- which would be the equivalent of what we've done to Chrysler, are doing to GM, what the British Government has done to Royal Bank of Scotland and what most liberals wanted done (and may still be done) to Citigroup and Bank of America.

Fuck it. I want the CA GOP to pay for doing this. But bailout or not, they won't. Worse, they'll probably benefit either way. No bailout, government gets cut. Get a bailout, property taxes stay put and they have more to campaign against. Even in the case of a constitutional convention, I figure there are good odds the GOP can come out on top. Hell, Orange county went tits up and the GOP is still on top there.

So, since I don't favor cutting out my heart to spite my shit (grudge reduction), I think the federal government should bailout CA.

The only even slightly class-conscious pain-spreading proposal that I've heard is shuttering the DMV every other day. Cuts to the road systems are about as progressive as you can get with the state budget, although a lot of construction is tied up in less-discretionary bond funding. That and furloughing prisoners.

There's a bill kicking around that would instate an oil extraction tax. Let's see how far that gets. Even in these dark hours, some oxen are still out of gore's reach.

Also, thanks for staying up and rocka rolling this thread, Halford.

Honestly, I don't see any way that the Republicans don't win this confrontation. They win, bailout or no. (That's what makes Spike's comment so odd. California going bankrupt is the very best thing that could happen to them.)

Topics like this are so bizarre. There's plenty of money in the state to pay for all the things the government does. The mass psychosis that leads to absolute terror of raising taxes on the rich is going to look like the mass psychosis that prevented any effort to resist global warming.

137 and 140, ahem, ahem, see 24.

I'm not actually anti-bailout, but I just want to note to all the CA "We can't fix this problem because the next election is far far away" contingent that, uh, you all just had an election a few months ago. And I'm pretty sure that the state's budget problems didn't arise only after November. Seems to me that there was an opportunity for the self-deterministic populace of CA to get their shit together in 2008, but there was something that some might describe as a "massive state of denial."

I read that and wanted to discuss it here! Haven't read the thread yet, but i wish they could be honest and just cut pay.

The real reason to let California fail is that those people are just too pretty, and we hate them for it.

I'm going to recycle this quoted comment about Iraq, since it works just as well for this situation:

I feel like the woman whose husband refused to listen when she told him not to sell the family cow for magic beans. She's still forced to consider his welfare, but it's neurochemically impossible to be more angry. And she can see that, irresponsible as he was to do it, as soon as it dawns on him that he's been rooked, he won't repent or apologize -- he'll blame her.

So yes we have to bail California out but still: fuck you, California, and your font-of-all-evil GOP flying monkeys.

141: Topics like this are so bizarre. There's plenty of money in the state to pay for all the things the government does.

In many ways it was the massive wealth, and maybe more so, the long, long streak of California having had an above average rate of increase in wealth (and population) that has led to the crisis becoming so acute. California had been on a 100+year boom with a massive ongoing influx of private capital into California (no whinge here, California had many geographical and other features that made it an appropriate magnet for people and their money). The ongoing influx of outside cash enabled an overall have your cake and eat it too politics to work for decades (and it was great cake! I ate it for a couple of years and still have second thoughts on having left). An economy the size of modern France was built from very little in a century and a half.

136: We can't reduce California to the status of a territory, appoint a new government, then tell it what it needs to do to be readmitted to the union

This is another of those challenges for Federalism, what to do when one of the 50 experiments goes badly wrong. I do think that it is fair to say that with the federal interventions into Voting Rights/Jim Crow stuff, that the southern states did lose a bit of sovereignty (not saying that I have any qualms about the rightness of the intervention). Does this crisis warrant something at all similar? It lacks anything equivalent to the gross violation of the rights of specific groups of individuals the way the VR/JC stuff did so it seems harder to justify. But I do not think a bailout with some ongoing Federal oversight is off the table just because California is a state.

146: A lot of California's deadlock comes from the huge number of safe seats in the legislature. And Gerrymandering is a bipartisan project.

Can the US government pass a massive progressive tax on people who live in California, and then give all the revenue to the California government?

147: what to do when one of the 50 experiments goes badly wrong.

Should more properly read, what to do when an important aspect of one of the 50 experiments goes badly wrong. In this case, the governance model.

Is there any energy on recall (not that that would solve a thing, of course)? Or has that been cauterized since the Arnie coup (like Clinton and impeachment). Really, really fucking weird stuff. My what a fucking weird Overton window we have built ourselves.

Frankly, I'm really grateful--since I'm not loaded right now--that I don't live in California.

Here's what I don't quite get about California. (Maybe it can be explained by low property taxes and all the prisons.) From an on-the-ground perspective, it always seemed to me that getting services was harder and their quality lower in California than in Massachusetts. Maine, while much poorer can be more user friendly than either. In Maine you don't have to g to the DMV for basic registration transactions!

My personal impression is that Massachusetts has a better public health infrastructure, better access to health care (even before the recent reforms), maybe better schools and more of a commitment to drinkable water. (Seriously, it pissed me off in Davis that everybody had to go buy gallon jugs at the grocery store instead of coming up with a communal solution.) And yet the income taxes in MA, while not low by national standards, are lower than those in CA.

Also, I don't quite get the property tax thing and how Prop 13 works. I seem to recall seeing ballot initiatives all the time about overrides to pay for special services or parks in Davis. They passed fairly often there.

I'm seriously thinking of not waiting for the Legislature and just raising my own damn taxes. I've already registered my car (full disclosure: not very valuable), but now I want to send in twice that check again to make up for Arnie's VLF cut.

I can probably up my marginal income tax rate a bit too. That's a bit more of a calculation.

It's pretty pointless to do this alone. Anyone with me?

My other idea is to go down to the Capitol and open up a pitchfork stand.

There is no energy on recall. The original energy on recall came from right-wing radio barnstorming on Gray Davis restoring registration fees from one-third previous levels.

Does Obama even have the authority to bail out California? Stretching the TARP to cover the auto industry is one thing. But setting a president of providing loan guarantees to cover state debts is a really significant change to the relationship between federal and state governments. This may not be an instance where congress will just let him write a check.

I seem to recall seeing ballot initiatives all the time about overrides to pay for special services or parks in Davis.

That's the legacy of Prop 13 and its cousin 218 -- the right to vote on taxes. Legislators can't impose those taxes on their own, and the money has to pay for exactly what it's on the ballot for, especially within geographic areas.

The main part of Prop 13 has to do with the increase of property taxes. Granny couldn't stay in her home because the taxes were going up so fast (though she could flip it and make a mint; Granny was useful and real), but the even bigger scandal than the fuckers next door in 88 is that commercial properties get the same benefit that Granny does. It seems possible that a split roll initiative -- one which set up different rules for commercial and residential properties -- could pass, but even that would be very, very difficult.

Maybe Sally Struthers could do TV ads?

"For the price of a venti latte with two shots a day, you can help make sure that a Californian can continue to get better public sector services than you'll ever receive while paying taxes lower than you do."

153: Yeah, I assumed there was not. Just another interesting data point. Centrist megafail on the original recall.

95
Again, California isn't in a "massive state of denial" -- or any more so than anywhere else.

I think 92 counts as self-pwnage of this. The people who support Proposition 13 are in denial, aren't they?

Wrongshore, I did know that somewhat. I was pointing more to the fact that people often overrode it. Still dumb.

The commercial thing sucks even worse, because if you trade business properties in complicated arrangements, you can avoid realizing taxes. I think that that makes them valued at the lower value for property taxes too. I should look that up, but I'm lazy.

Maybe they're working thru the furlo because they were already overpaid. This just brings the hourly wage down to reality.

160: "They" would be me. That is, I'm a state employee (although not in CA) and will quite possibly be laid off in the next couple of weeks. It's funny--the popular take on working here at Large Midwestern University was that the money was anywhere from $5000-$10,000 less per year than private sector for folks in my area of work, but that we got it back in not having to dress in corporate drag, a pleasant work environment, free tuition for up to two night classes per semester and good health insurance. Now, of course, with the wage freeze and the insurance rise and the end of free tuition and the previous round of layoffs that mean a crazily increased work load we're suddenly right back at $5,000-$10,000 less. Now, I'd rather take a pay cut than get laid off and lose my insurance, but thanks to our genius Rethug governor and our disaster-capitalism Board of Regents, that's not on the table.

But if it was, I assure you that a drop down into the mid-twenties for maintaining the website, preparing professional-grade promotional materials, planning our conferences, preparing grant budgets, reconciling our spending and doing all the boring secretarial work would not represent a "correct" wage that I should have been earning all along. It would represent getting screwed by my university, my state and my nation, also the awesome possibility of losing my house.

also the awesome possibility of losing my house.

Shit Frowner. I hope that things turn out okay. YOu work for scientists right? Are there admin jobs on grant-funded projects that you could apply for?

161: But, but, we have a new stadium! I hear it will only be used seven times a year so, if you lose your job and your home, you could establish a tent city in mid-field.

Especially if you live in DC -- $6.64 back from the Federal government for each dollar paid in.

Doing a drive-by, so I may have been pwned, but you really can't compare D.C. to self-governing states when it comes to this.

f a state's finances aren't sustainable, the Feds should step in and restructure them like a failing bank or auto company.
Yes please! In all seriousness, we need some of that old-school IMF shock therapy lovin'

Sorry. I posted and then went to the gym.

147: But I do not think a bailout with some ongoing Federal oversight is off the table just because California is a state.

No, it's not. But it would require legislation. And it's not clear that Congress can overrule a state constitution in this sort of situation. Can Congress dictate that California from now on needs only a majority vote in the legislature to raise taxes? Can Congress raise California taxes? IANAL, but I doubt it.

By which I mean an old-school IMF-style disregard for our sovereignty and our (awful) institutions, not the specific low-tax/low-service Washington Consensus. But condition a bailout on state constitutional reform? Yes please.

162: No, research is really tight too. But it's possible that I'll be able to wait this one out if I'm lucky--some supplementary information just came in. I tell myself that we do have a really good finance guy in our part of Large Midwestern University and he's gotten us out of various tight spots in the recent past. (And that's high praise from a DFH; we don't praise finance guys lightly.)

Although a tent city in the stadium would be fun too in its way. Solidarity forever with my tent-dwelling brethren! And it would force me to get rid of 99% of my possessions, so that would be something.

Seriously, things are starting to look visibly shabby around town. It's spooky. Only in the past few months have I really felt the recession, but I can sure see that it's here.

165: I almost added a caveat to my 147.2 that I have very little comfort with what a federal attempt at helping with the fiscal part would actually look like.

143 - Yeah, to some extent you guys are right about denial. You can make rationalizations about not foreseeing the depth of this budget crisis, which we've been realizing over the past few months. We didn't know how extremely short we'd be because of the recession. But we've had the annual late budget for years and, yes, all the foresighted people I know have seen this coming.

But denial is one of the strongest human forces ever. Saying that we shouldn't do that is true, but no more true than saying that people shouldn't live in the path of natural disasters or should get out of bad relationships. This is complex stuff, with distant consequences and no visuals. Humans are really bad at that shit. Getting people to vote yes on boring complicated propositions to change governance that the other side will reduce to Raise Your Taxes is very hard. Maybe it takes a collapse and we're weeks from it.

146 - I am sorry about our batshit evil flying Republicans. We've mostly stopped exporting those, haven't we?

Stormcrow: But I do not think a bailout with some ongoing Federal oversight is off the table just because California is a state.

I think this is the important point. I'm aware there are limitations on the ability to pass neccessary constitutional amendments. I am also aware that the creation of Constitution of 1787 was essentially illegal (but legitimated by state approval). Menawhile, I lived through the time in Texas that we were in virtually the exact same situation as California with regards to the economy and the court system, and boy, (local) Great Depressions suck. So much so that I wish things to be all better for all the people I like in CA.

jim: We can't reduce California to the status of a territory, appoint a new government, then tell it what it needs to do to be readmitted to the union -- which would be the equivalent of what we've done to Chrysler, are doing to GM, what the British Government has done to Royal Bank of Scotland and what most liberals wanted done (and may still be done) to Citigroup and Bank of America.

The big banks will have to go. There's no avoiding it. It's a question of when. For those reasons, the big five have got to go, and to get that done, Summers and Geithner have got to go as well. This isn't going to happen until the US gets punched in the face again; luckily, that's on the menu, since nothing has been fixed. (And California might just be the disaster that turns the tide.)

Back to California: all the above said about Texas, nobody bailed us out, which was a very important factor in getting the Lege to straighten the fuck up and fly right (in relative terms). With no one to rescue the pols, and some additional ass-kicking from the federal courts, the pols had to do the necessary things to straighten that shit out. But. It took a long, long time.

If it were up to me, I'd offer a deal: money to fund the full income stream for 180 days, plus a complete takeover of existing CA obligations (conversion to Treasury bonds, essentially), provided the conditions are. Conditions would be the requirement that the state Lege null and void the existing Constitution and replace it with a new one drafted by the Feds. (Based on a generic state Constitution with mods - no referendums on amendments (creating laws that can function like laws passed by the Lege is fine), and barring of amendments that dictate budget limits, and banning of the filibuster. Hell, since CA likes to experiment, I'd go further: multimember unicameral lege, with the Speaker playing the roles of Speaker and Lite Guv.) I would bet that were incentives applied with enough enthusiam (for instance, one could note where R and D Sens, live, while also noting that there are plenty of furloughed state employees with nothing to do, and gosh, even the cops are cutting hours), the Lege would find a way. It's just a question of applying the right kind of pressure.

That's a daydream tho: Wall Street (Nueva Yorka, that is) does not want to bail out the other coast (bailling out the east coast is a national priority, see?), so no action from Summers, Geithner or Congress. Not until panic resumes. The upside is, that's about 90 days away, and this whole post-crisis inflation panic thing is going to evaporate, just like my daydream above.

max
['Cheer up: things are about to get a lot worse... which just might save all our asses.']

We've mostly stopped exporting those, haven't we?

Oh, there's no need to apologize. Jesse Helms was my senator for 30 years. But Reagan (and his loony economics) is like a nasty virus that keeps reinfecting giant segments of the American polity, even from the grave. God, how I hate him. If only it were as simple as digging him up and staking him.

I would love anything that broke the stalemate, but I don't think of that in terms of pressuring the Legislature. Except for the Republican minorities, who are acting appropriately for their incentives, which don't appear to include the welfare of the state, I think our Legislators are as good as any. I think they're so bound by constraints that they can't act. I suspect any group playing by our rules would be about the same. So when I think of fixing this, I think of removing the constraints, not pressuring individuals.

Incidentally, it is a small sadness that our Senate majority leader is serving now, through this chaos. It is a huge waste of his capacity. I think he'll fail, like anyone would, and if he didn't have to deal with the budget full time he could be crafting really interesting legislation that other states would emulate. His real interests are mental health and the environment, but he can't attend to anything but the budget.

Someday I will gain enough confidence to stop qualifying all of my assertions with "I think".

174: We know you will.

At least, we think you will.

63

What's going on now (high-services, low-taxes) is unsustainable. ...

California doesn't have low taxes, they are well above the national average.

If we can bail out banks for billions of dollars to either the banks or the auto companies, the feds could pay to help maintain social services to the poor in the country's largest and most important state...Anyone who doesn't understand this, to my mind, can't walk around and pat themselves on the back for being a liberal.

I agree, and Halford was right to call Becks out on this, but...

We're talking about the federal government issuing loan guarantees so that the state can finance its services in the bond market....California has unbelievable resources and has never (and probably will never) default on its debt.

The problem is that big loan guarantees without systemic reform will mostly postpone the problem. If you look at the proposals on the table back a month or two ago -- California does almost $25 billion in borrowing with maturities of up to two years -- that gets away from the worst cuts over the next two years but barring a huge resurgence in revenues creates a crunch when you have to pay the loans back within two years. If the Federal government does become your creditor and it forces a bad showdown there.

Now, I think we should do more borrowing than we are, there should be guarantees for that borrowing so interest rates aren't extortionate, and that revenues will come back (California revenues are highly cyclical). But they likely won't come back enough. Perhaps even more important, a big chunk of the rise in revenues from recovery is already precommitted because the February package has lots of temporary revenue raisers that will expire about two years from now. So tax rates are scheduled to drop as recovery is happening.

California has reached the end of the line with its current budgetary system. It MUST be fixed. Given all the crap written into the constitution, voters have to participate in this. Like I said, tying this in to Federal assistance would be the best way to do it.

But the current fiscal crisis, combined with the financial crisis, has made it difficult or impossible for the state to finance its ongoing operations on the private market in the same way that it ordinarily would. That's what's driving the immediate crisis

No, the size of the budget hole itself is the main driver of the immediate crisis. If it had a reasonable budget California could borrow at something like normal levels.

But there should be more Federal support for the muni markets -- California isn't the last public entity that's going to run into short term borrowing problems. Plus, in a macro sense it's just ridiculous to let the states go down.

California doesn't have low taxes, they are well above the national average.

California does have low taxes, overall. The income tax is higher than normal, the property tax is much lower. Be wary of charts that show dollars per capita; California is a large and rich state.

87

California has unbelievable resources and has never (and probably will never) default on its debt. So the realistic need for those guarantees to be called upon is vanishingly low. But the current fiscal crisis, combined with the financial crisis, has made it difficult or impossible for the state to finance its ongoing operations on the private market in the same way that it ordinarily would. That's what's driving the immediate crisis and all the state is asking for are loan guarantees that, in all likelihood, would never, ever have to be called upon. That Washington is unwilling to do that speaks to its priorities (and also to the ineffectiveness of the CA congressional delegation, and to the fact that California is now seen as a safe Democratic state, and therefore disposable for Obama).

This is nonsense. California has been spending more than its income for many years. You do that long enough you go broke. This is not some minor cash flow problem.

But Reagan (and his loony economics) is like a nasty virus that keeps reinfecting giant segments of the American polity, even from the grave.

My position on this is that Reagan isn't a native Californian, so you should blame Illinois.

(Yes, I know this position is untenable, but it brings me comfort).

By that reasoning I could blame Utah (and the Mormons) for Howard Jarvis, may his soul long suffer.

179

California does have low taxes, overall. The income tax is higher than normal, the property tax is much lower. Be wary of charts that show dollars per capita; California is a large and rich state.

I don't see anything unfair about per capita comparisons. The state sales tax rate is also high.

Shearer, you know zero about what's going on, so please do some research or STFU. Californians don't pay particularly high taxes, relative to the country as a whole. There is is essentially zero chance of the state defaulting on its debt, both given the nature of the state's economy and given particular features of state law. California was not spending more than it was taking in, in many years -- the problem is that because of an extremely screwed up system, revenue was extremely cyclical and so the state spending structure was unsustainable in a downturn.

161 is sort of like what's happening here, or has been happening here for some time (years, really.) Less money, but other sorts of benefits to compensate, including the important one (to many of us) of working in an arts institution. We got a wage freeze earlier this year, and tomorrow is the staff meeting at which various cuts--no one knows exactly what, but pay, retirement, and health care are the only realistic possibilities--will be announced. Today is for layoffs.

(I must admit that I sometimes wonder if Frowner ever crosses paths with my brother, who works at the same Large Midwestern University, doing I have no idea what but something that involves health-related research. Probably not, but it still crosses my mind.)

Re 178, I didn't mean to imply that the crisis wasn't caused by a hole in the state budget (that's what I meant by "fiscal crisis," if that wasn't clear). But the budget crisis can't be addressed without either (a) horrifically draconian cuts on the backs of the poor, which won't actually do much to fix the crisis, or (b) major constitutional reform.

I think that everyone with a brain agrees that constitutional reform is necessary. The problem is figuring out the mechanism that gets you from "no federal loan guarantee" to ease over the current crisis to "fixing the constitutional system." Just saying you want to heighten the crisis won't necessarily produce good results -- and the fact that not providing loan guarantees is exactly what the Republicans who caused the crisis are asking for should really give you pause. In the meantime, of course, we're having a world of (a), draconian budget cuts that, as I'm going to keep repeating, will kill off a large number of poor people.

A federal loan package that required structural reform would be nice, although it's hard to see exactly how one would set this up. But the Obama administration has shown almost no interest in coming up with a plan like that at all, in large part because its attitude seems to resemble Becks' in the OP.

182: Exactly. Engage in a little magical thinking (or this massive state of denial someone mentioned).

Also, thanks for the excellent contributions to the thread, Megan.

(And Halford and everyone else, I was just happy to see Megan clarify my own thoughts for me so effortlessly).

But the budget crisis can't be addressed without either (a) horrifically draconian cuts on the backs of the poor

I'm not sure I believe this. Surely there are some horribly draconian cuts you could make on the backs of the rich?

Reagan isn't a native Californian, so you should blame Illinois

Now Austria has got some 'splainin' to do.

189: That would be my question also. Except that I'm guessing you'd have to cut the rich and the upper middle classes benefits.

Oh, gee, thanks. I'm glad to hear that my thinking is in line with others'. I worry over this stuff a whole lot, so this thread is practically fried and topped with cream and berries.

Also, it seems to me that the lack of a federal loan guarantee would raise your cost of borrowing $25 billion by a couple billion or so. Is the state really going to collapse for the sake of a couple billion?

I find that implausible. It appears to me that this is more of a pretext for slashing social services. I'd like to see Californians focus their effort into pushing back against that, rather than grasping for the straw of the federal bailout end-run.

The problem is figuring out the mechanism that gets you from "no federal loan guarantee" to ease over the current crisis to "fixing the constitutional system." Just saying you want to heighten the crisis won't necessarily produce good results -- and the fact that not providing loan guarantees is exactly what the Republicans who caused the crisis are asking for should really give you pause.

I agree that the cause pain to the poor >> then a good government miracle happens! is deeply flawed. A huge risk at best. But the hope would be that the Republican anti-tax ideology could be permanently discredited by seeing its true consequences.

Berries and cream on french fries is a disgusting regional specialty. No bailout!

But the Obama administration has shown almost no interest in coming up with a plan like that at all, in large part because its attitude seems to resemble Becks' in the OP.

they've shown no interest in using TARP money to help munis at all, the banks and auto companies take first priority. In fairness, Congress did give some help with the Build America Bonds.

I'd like to see Californians focus their effort into pushing back against that, rather than grasping for the straw of the federal bailout end-run.

I think that's right. The voters of California do have the power to fix this directly. The money is there within the state for California to have good public services. Organize!

Organize how, PGD? Const. Convention? Redistricting? Pushback in Republican districts?

What do we do in the short term?

What do we do in the short term?

Start planting onions and turnips.

I also have to say that I am pretty disappointed with our Democratic legislators for accepting the framing that the initiatives went down because Californians refuse any more taxes. The initiatives could also have been said to fail because "we hate this fucked up system and can't sign on to any more arcane schemes and fuck all of y'all because we don't understand. Do your own budgeting!".

So, yeah. I'd like to see our Dems have more spine. Arnie isn't helping, because he seems reasonable on some stuff, but then is entirely unpredictable just to be contrary.

What do we do in the short term?

Organize a general strike. Where are the state employees unions on this?

200: Budget-wise, is a strike that different from the furloughs?

202: Not really, but it would keep the employees from working, which was the whole original complaint of this post.

Only in the past few months have I really felt the recession, but I can sure see that it's here.

I spent the morning in Queens Supreme Court, sitting through motions on a whole bunch of cases. Out of 25 or so cases before the same judge as mine, about five were related to foreclosures. Might have been a fluke, but it was a lot of foreclosures for one motion calendar.

(Also, smell and ethnicity is weird. Petitioner on this case had a very particular old-Irish-guy odor -- not that he wasn't clean, but you can smell even clean people. It's just peculiar standing next to someone and thinking "You smell exactly like my Uncle Jimmy.")

Er, 202 should be 201, I'm getting recursive again....

I'm just saying, "You can't furlough me, I'm striking" might not be that effective.

a very particular old-Irish-guy odor

Whiskey.

200:A general strike is a good idea, but I think it's illegal.

I think it's illegal.

Things worth doing often are....

I agree completely with 199. It's totally mystifying to me why the state Dems accepted that framing.

And, I basically agree with 196, the federal loan guarantees aren't happening, so Californians do need to organize. There has even been some OK pushback from some folks in the legislature. I don't see why we shouldn't get to be pissed off at the Obama administration, though.

But even if a big progressive pushback happens, the reality is that massive pain for the poor is inevitable in the current setting. This is in part because the poor don't have much of a lobby, but it's not just class warfare from the rich. It's also because social services for the poor is one of the few really big expenditures that comes out of the general fund, as opposed to specially protected funds, so it's really one of the few things that the legislature CAN cut.

And with that, I'm off to watch the Lakers victory parade (privately funded at the last minute, since the City of LA couldn't pay for it). We may be in a state of social collapse, but at least we didn't lose to Boston this year!

Organize how, PGD?

For starters, tidy your desk.

Its nice that the rich people of California are willing to shell out for an emergency Lakers parade, but not hospitals.

210: For starters, tidy your desk.

"And get some rest. You look tired. " Heebie is Jason Bourne.

209: I've been wondering how come they didn't put cutting those specially protected funds on the ballot along with the new taxes.

213 is me. Sorry, been having trouble today.

207/208: Illegal how? I have no doubt that The Man would like it to be illegal, but I think we still have some labor laws.

Of course, organizing a general strike quickly enough to effect the California budget crisis would be about as easy as eliminating the Air Force, so legality isn't all that big a problem.

Two of the propositions were for raiding designated funds. (D and E, maybe?)

It is a hard question, because we could sure use that money to help us right now. Otoh, it punishes the programs that were set up by propositions that were responsible enough to establish funding streams for the work they wanted to do.

Besides, we go for months without a budget every year. I don't know how we'd get people out into the streets with the slogan "This time it is REALLY bad." Maybe when we are insolvent and issuing IOU's people would respond. But a general strike? That's so shrill and uncool and all. Besides, there might be good waves that day.

Berries and cream on french fries is a disgusting regional specialty. No bailout!

I assume she meant funnel cake. Mmm, funnel cake!

What would the general strike call for? The state is spending more money than it's raising via taxes, so the only three options available are to spend less, tax more, or borrow to cover the difference. The people of California have repeatedly and emphatically voted to borrow to cover the difference.

Now that borrowing money is getting more expensive, the people of California are trying to get the federal government to loan them money on more advantageous terms than those who invest in the bond market.

At some point even that won't work, and we'll be back exactly where we are today but even deeper in debt. How is that a good thing?

That's so shrill and uncool and all.

I think we gotta implement a tax on "cool". You guys have way too much of it for your own good.

Lambent Cactus understands me.

What would the general strike call for?

A constitutional convention. I can't see any other way to ever break this cycle.

I'm not gonna read this whole thread, but re: the last handful of comments, wow, Spike, you're calling for employees to violate the Dills Act, the MMBA, and every other public employment statute in the state? I'm sincerely puzzled by your contention -- and Becks's, in the last sentence of her post -- that the only way to resolve California's budgetary fuckup is by putting it upon the shoulders of public employees to engage in illegal activity and lose their jobs. Demanding that a bunch of state and state agency employees put themselves at risk of getting fired is a good solution how?

As for the working through furlough issue, it's theft of labor pure and simple.

It's not just the public sector. My employer offered the option of voluntary participation [cough, cough] in a program where I could either take two months of unpaid leave or continue working and have my salary reduced by 15%. When I indicated that I would sign up for the former, it was made abundantly clear that there might not be a job waiting for me when I returned. So I signed a nice legal agreement voluntarily forfeiting 15% of my pay. OTOH, I'm far from destitute even at reduced pay. Also, I am posting a comment on company time, so...

224: Also, I am posting a comment on company time

Rad!

224: So how's the practice of law these days?

Let's impose a 50000% tax on any political-speech spending in CA by religious organizations based outside of CA, retroactive to 2006, to start with, and see what that does to the budget issue.

For that matter, taxing churches would be an excellent revenue source and would make me forgive California all of its previous sins.

Spike, you're calling for employees to violate the Dills Act, the MMBA, and every other public employment statute in the state?

But here's the beauty of that: who's going to enforce those laws? Fellow public employee union members?

Seriously, though. Organized labor can and should be doing something to prevent its employees from being pressured to work during a furlough. Otherwise, why even have unions?

Weird - Jammies has to take one week Mandatory Time Off each quarter this year, and the company is being super strict about them not working during your week off. As in, not out of the goodness of their hearts, but that there is some legal thing going on where they explicitly do not want you to even check your work e-mail, or else they can't do this particular MTO construction. I wonder what the difference is with these other furloughs.

But here's the beauty of that: who's going to enforce those laws?

The state and state agencies.

Is Jammies paid hourly? Is he in a union?

I'm guessing that Jammies is a salaried employee. If a salaried employee works even an hour during his week off, FLSA requires that he gets paid for the whole week.

I wonder what the difference is with these other furloughs.

If private sector employers fuck up wage and hour issues, employees can sue them and win. The public sector tends to more of a "labor law? what labor law?" approach at times.

Organized labor can and should be doing something to prevent its employees from being pressured to work during a furlough. Otherwise, why even have unions?

Rest assured, they are. This does not include encouraging members to engage in illegal activity which will result in their firing.

184

... There is is essentially zero chance of the state defaulting on its debt, both given the nature of the state's economy and given particular features of state law. ...

How can you say that? If a bond payment is due and California has no money default will occur.

He is salaried, so 233 probably explains it, although it's weird then that hourly workers are allowed to come in, unpaid.

This does not include encouraging members to engage in illegal activity which will result in their firing.

Well, maybe it should, because whatever they are doing now appears to be pretty ineffective.

If a bond payment is due and California has no money default will occur.

California has money. The state constitution places debt service payments second in line, behind education. The numbers tossed around are $56B in expenditures at or below debt service in priority, of which debt service is less than $6B. So if California runs short of money, other things will get cut before debt repayment; e.g. services for the poor.

I imagine the concern is amending the constitution to place debt repayment lower on the food chain.

237: I think -- but I'm not sure -- that the Governor's making an end-run around this by contending that what's being done to state workers is not a furlough per se, but a salary reduction facially tied to two extra comp days per month. Again, I'm not sure. It seems illegall to me, and there are several lawsuits challenging it.

229
But here's the beauty of that: who's going to enforce those laws? Fellow public employee union members?

This reminds me of yet another complaint about dysfunctional government in California: the prison guard's union is too large and influential. In other words, hell yes, there's a union that would be thrilled to enforce those laws.

-l

237: Other things being equal, they're not. My guess is that it's more a public sector/private sector thing than a salaried/hourly thing. And some employers are just a lot more attentive to wage and hour compliance issues than others. There's a vast shitload of unpaid, don't ask/don't tell overtime all over the place.

239

I imagine the concern is amending the constitution to place debt repayment lower on the food chain.

Or perhaps the constitution will be ignored. Sounds like that would be a popular move in some quarters (like here). Personally I wouldn't lend California money at any price.

I wouldn't lend California money at any price.

I would, but I want the Golden Gate Bridge as collateral.

Yosemite for me.

Speaking of stupid state government budget problems: a Republican candidate for gov'nor of Ohio is running on the promise to eliminate the state income tax, which right now accounts for 40% of the state's budget. Oh yeah, and Ohio is facing the same budget shortfalls right now that everyone else is.

I can't imagine they would actually cut revenues 40%, right now, but I also can't imagine that proposing massive compensating hikes in sales taxes will help the Republicans sound "pro-growth."

Basically this guy is campaigning on a promise to shut down the state government.

I would, but I want the Golden Gate Bridge as collateral.

Now we're talking. If CA defaults we can repossess that bad boy and use it to replace the 14th St. Bridge.

Californians don't pay particularly high taxes, relative to the country as a whole.

My understanding is that in the aggregate, Californians come in around 16th highest -- closer to the middle than the top, but still above average.

Organize how...What do we do in the short term?

You could do worse than signing up with Courage Campaign. No, they are not preparing a general strike. But they are starting to build support for a constitutional convention and they're doing daily actions against the worst cuts. They are run by Rick Jacobs, a gay, former-investment-banker Deaniac Dem who has done really awesome things with his too much time and money. He's also waded into the No on 8 organizing, determined not to leave it up to the EQCA cabal that shied away from the fight last time.

245, 246: Kate Beckinsale.

Yosemite for me.

Harder to scrap out for cash, though.

247: Right now the flavor of the day in right wing tax reform is the "Fair Tax"*, so eliminating everything except sales taxes is going to be pushed all over the place.

* My source inside MiniTru says the next proposal will be the DoublePlusGood Tax.

Harder to scrap out for cash, though.

That's what you think, hippie.

Isn't Yosemite yours already? We've got plenty of state parks Arnie wants to close. I'm still picking out which one to plant my drug garden in when they close the gate and walk away.

Yosemite belongs to the bears, man. They have won.

253: You just try getting oil out of half dome, then.

Let the bears pay the bear tax!

Yosemite belongs to the bears, man. They have won.

Pshaw. The so-called back country there looks more like a wilderness theme park than a place the bears have won. No place that has cut steps into stone paths should take itself to seriously when it talks about "wilderness".

The first time I hiked 'round the back country in that park was the most crowded and developed trail I'd ever seen, fwiw.

Let the bears pay the bear tax!

Fair enough, but Californians weren't willing to pay the Homer tax either.

not that, outside of the main valley and touristy bits Yosemite is exactly crowded in an objective sense. I was just used to days/people met rather than people met/days as the appropriate unit.

The first time I hiked 'round the back country in that park was the most crowded and developed trail I'd ever seen, fwiw.

you're not in the real back country. The last time I hiked in the Yosemite back country I saw four other people in three days. On a beautiful July 4th weekend with perfect weather.

The ballot initiative stuff is weird. Our Eastern bits of direct democracy don't bother me quite as much. There are things like rules about districting seats that I think would be better handled by the people, since politicians have to think of their own seats. And I don't think that our sensible reduction of the penalties for marijuana possesion could have gotten past a legislature.

I've also gathered signatures for a ballot initiative. We got enough signatures to certify it. Luckily, we didn't have to go through with it, but it was a very important lever to use in pushing the legislature to enact health care reform.

I've been all over the Constitutional Convention for a long time now, way before it got popular. I have the original t-shirt from when they played in church basements.

Yes, I am signed up with the Courage Campaign and like the work they're doing. That's a good suggestion.

We've got plenty of state parks Arnie wants to close. I'm still picking out which one to plant my drug garden in when they close the gate and walk away.

So Prof. Kleiman says that it's a pipe dream [tee-hee] to believe that legalizing marijuana and taxing it would solve California's budget problem. But that's because he's thinking too small! Instead of contenting itself with a meager tax on private production, CA could grow and sell the pot itself on properties that used to be state parks. As a monopoly producer, it could easily achieve gross margins of 70-80%. On a roughly $30b market (by Kleiman's calculation, assuming no exports to other states), that should easily cover debt service with room to spare for saving social programs.

If Arnie was really ambitious (and didn't want to create a bunch more government jobs at the California Pot Plantation Commission), he could auction off an exclusive concession to operate the business for 20 years. That should be worth at least $50bn NPV, given appropriate assurances of a protected market and federal non-interference.

English monarchs used to do stuff like this all the time when they couldn't get parliament to raise taxes. Where's the sense of history, I ask you?

Personally I wouldn't lend California money at any price.

I would lend my entire savings to California in exchange for just two minor Hollywood starlets pledged as collateral.

Dude. If we could ignore the state Constitution, I don't think we would start with ignoring debt service. If we could ignore the state Constitution, we could pass a budget with majority rule.

251=>265. That is, unless you...Naaahh, PGD wouldn't do that.

you're not in the real back country. The last time I hiked in the Yosemite back country I saw four other people in three days. On a beautiful July 4th weekend with perfect weather.

Nah, we were about as far back, and as high up, as you can get. It's still extremely heavy traffic for 'back country', hence the trail development and relative* (see 260) density.

Lovely park though, I was just taking the piss.

Oops, I committed a major misreading of Kleiman in 264, one that should have been obvious if I had thought about it. His estimate of the cannibis market in California is just over $1bn, not $30bn. So it's possible that I might have to add government-owned meth labs to my proposal to make the numbers add up.

264: Screw using the parks, that would be a pain to get to and manage. Pot has much better water use characteristics than some of the stuff grown in the central valley, and better markup, just start producing there. And export everywhere.

For starters, tidy your desk.

How the fuck did Heebie know what a mess my desk is?

I imagine the concern is amending the constitution to place debt repayment lower on the food chain.

there's also a concern with the creditor appearing on the front page in the story about the cuts to health, etc. Heartless banker steals food from kids, etc. -- I don't think they mind taking the food that much, but they hate the publicity. Basically, if lending makes you a player in an ongoing and highly publicized mess, that is bad.

But no one thinks payments won't be made. The state government does not have the clout to disobey the law.

Not chattel, PGD.

The so-called back country there looks more like a wilderness theme park than a place the bears have won.

That may be, but no matter WHAT you do with your food the bears will get it. (Good work, bears!) They will send their cubs out on the very slenderest branches that you can find to hang it from, they will fling your bear canister off a cliff until it breaks open on the rocks, they will open your car like a tin of sardines. I suppose humans have still won by day, but the bears are truly impressive by night.

they will fling your bear canister off a cliff until it breaks open on the rocks

Disbelief.

268: try hiking into the park from the eastern Sierras, the back entrance. Think 395. My idyllic July 4th weekend was spent hiking up from Green Lake (near Bridgeport) over Virginia Pass down into Virginia Canyon.

Either that or hit it in mid-late October just before the snows. You'll be all alone then too.

(It is actually possible to hold out against the bears for a while if you are extremely scrupulous in all regards, but the odds are against you; eventually the bears in your personal vicinity are going to be among the clever elite, and they don't need you to be careless. They know that even if it doesn't smell like food, there's food in there somewhere, and they'll get it!)

Disbelief.

Ours was only severely dented by the experience; when we brought it back for the deposit they said they'd seen more successful (from the bear's point of view) versions of the same thing.

there's also a concern with the creditor appearing on the front page in the story about the cuts to health, etc.

Not a chance that this will make a difference. The bondholders will have their own arsenal of sob stories about old age pensioners and charitable foundations who hold the state's debt.

To the extent that the banks show any mercy, it will be of the loan-shark variety: offers to restructure the credits with a longer maturity and higher coupon, and more restrictive covenenants that will permit them to sweep the state's tax receipts before they even get credited to the general fund.

I'm a bit surprised that no one has cited the extremely engaged dday of Calitics, posting the following at digby's place:

This may be a contrarian view, but I think a bailout would delay the changes desperately needed, nor would it even help the most vulnerable in society over the long-term or even the short-term. We need to deal with the problem at hand.

just two minor Hollywood starlets pledged as collateral

PGD's trying to rob you, California. I only asked for one.

275: well it's been years, but I have been in from the back.

Look, I'm not saying it's impossible to be alone there, just that California is relatively crowded, and Yosemite is pretty densely used for a remote park.

But I grew up hiking places where you could still go out in even into mid spring sometimes and be the first person on the usual trail that year, and have to break your way through all sorts of new growth. And that's without trying to get away from people, just going a little bit away from population center.

it's been years, but I have been in from the back

I hear that costs extra.

(bah-dump-TSHHHH!)

281: "But I grew up hiking places where you could still go out in even into mid spring sometimes and be the first person on the usual trail that year."

There are public sidewalks in Pittsburgh that meet that description.

fewer bears, though.

at least, outside of certain districts.

285: Yes, but I'm still sort of bitter that CA has trails in its national parks and while I can't get a fricking stroller down the sidewalk without stopping to push back branches.

What, you don't carry a machete on your walks?

machete + stroller = calling the police.

273: This is why I bring anti-ursunnel land mines.

286 is fair enough, but not precisely CA's fault.

Oh yeah, well where was our bailout? Huh, CA?

Actually, Pgh does have periodic bears in the midst of residential districts. Then there was the time that AB was going to the movies (down on Forward, for locals) and there was a deer in the street, running in line with the cars - car, car, deer, car. But that was just a few blocks from a ~550 acre park, and so not surprising.

230: As in, not out of the goodness of their hearts, but that there is some legal thing going on where they explicitly do not want you to even check your work e-mail

I have no idea what line of business Jammies is in or his role, but I have known a few places (even non-banks) that implemented something similar to the following "controls" recommendation for relevant people in their organization. All banks should have a vacation policy, which provides that officers and employees be absent from their duties for an uninterrupted period of not less than two consecutive weeks. (Generally for just one week though—this is the US private sector after all where it's considered more important to stop fun than embezzlement.)

In the spirit of the DC tax argument from way above, I think one avenue is to amend the relevant part of Article 1 Section 8 to read "To exercise exclusive Legislation in all Cases whatsoever, over such Districts (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seats of the Government of the United States," and put a western "DC" in California. What 10 mile square of California would work best for this purpose?

Actually, Pgh does have periodic bears in the midst of residential districts.

!!

In all my years there, I encountered many deer and never heard of a bear. How exciting.

294: In [hometown] I met a woman who'd had a cougar jump in through her window (chased out by a little dog, oddly enough). My folks used to get deer in the backyard 3+ times a week at there old place. Now probably only every few weeks. Bear are pretty rare, don't like the noise, but I have seen them in peoples yards a few times. Never saw a cougar in the city limits (though above isn't the only one I've heard of) though, and only rarely in the bush. They're pretty skittish.

I hiked the John Muir Trail from Mt. Whitney to Yosemite Valley in 1993. The top of Mt. Whitney and Yosemite, not surprisingly, were the busiest areas. There are sections in the middle of the trail where we saw very few people (maybe a couple here and there), but I don't think there was a day when we saw no one. I've heard it's gotten a lot busier everywhere since then. And apparently the bears have gotten to be much more of a problem. There was a whole section in the middle where we never had to do anything to protect our food. Don't think that's possible, or even within the rules, now.

292: He's a stay-at-home-dad. That's what makes the whole thing so confusing.

Yes, but I'm still sort of bitter that CA has trails in its national parks and while I can't get a fricking stroller down the sidewalk without stopping to push back branches.

I'm bitter that your state sees the point in having sidewalks.

I'm bitter that your state sees used to see the point in having sidewalks.

There are areas in CA without sidewalks because, I suspect, they don't want to pay for them. Affluent suburban areas with big driveways, of course.

298/299

Near our place, sometimes there are residual sidewalks. All uneven an with small trees growing through them, but there for a few blocks ... and then they just stop.

Also, the heavily maintained trails I've seen in the CA backcountry are pretty much all on NPS or USFS land.

We even have a street with a ton of pedestrian traffic, as it is the short cut from a convenient stopping place on the river back to the tube rental hut. Lots of people in bathing suits carrying inner tubes, stepping around parked cars to avoid cars driving by. If I weren't so lazy I would totally try to petition the city to install a sidewalk.

He's a stay-at-home-dad. That's what makes the whole thing so confusing.

You live in Texas. Surely you've encountered morons before?

By "we even have a street..." I mean that "we even live on a street..."

He's not really a stay-at-home-dad.

Also, the heavily maintained trails I've seen in the CA backcountry are pretty much all on NPS or USFS land.

That's true. It just at first boggled my mind to see it at all in "backcountry", being mostly used to parks with at most flagging and post-winter cleanup if you were lucky. Then again a lot of the wandering around we did was just in forested land, not parks at all.

Wait, sorry, 304 started from the mistaken premise that the "he" in 297 was the band practice parent in 206 on the other thread. No insult to Jammies was intended. I just can't read.

Come to think of it, many of the trails in the busy backcountry are heavily maintained to try to protect/conserve the non-trailed land. People often walk on the grass next to a muddy trail in a meadow, creating more and more parallel trails, so if you raise up a trail bed with rocks for drainage, you can prevent a lot of that and keep the rest of the meadow from getting as trampled. Strong trails on switchbacks help prevent erosion. And so on.

Come to think of it, many of the trails in the busy backcountry are heavily maintained to try to protect/conserve the non-trailed land.

Yeah, this is why it's done. But it's a factor of the relatively high use. Of course, terrain matters too. But lots of places just never see the sort of use that requires grooming trails.

I am so glad that I don't live in a wildlife interface part of town anymore. At first I was all "Look! Bambi!", but I got to "stay the fuck away from my plants, vermin" pretty fast.

Also, the heavily maintained trails I've seen in the CA backcountry are pretty much all on NPS or USFS land.

Former logging roads yeah!

Where I'm talking about, they're not roads. But yes, those too.

My favorite California sidewalk was somewhere in Irvine. It ends abruptly in the middle of some ginormous block, with a big sign saying "Do not cross the street". Brilliant.

There's a beautiful suspension bridge over one of the river crossings on the Muir trail.

312: Yeah, former logging roads are often the way to get to a trailhead, but not the trail itself.

For that matter, so are current logging roads, with the caveat you have to ready to get out of the way.

314: this one is awful pretty, but that one is on a better walk. Both in the city though, so not really the same thing.

oops, got cut off somehow.

the second suspension bridge is part of a nice walk if you don't have time to get out of the city though.

In Los Angeles, the maintenance and construction of sidewalks are legally the responsibility of the property owner. Of course this is abhorrent to residents, so it is utterly unenforced.

Donald Stroup (High Cost of Free Parking) once proposed requiring sidewalks to be repaired at point of sale of property, with the option to get your sidewalk repaired at any point in your tenancy by a city crew, with the bill arriving as a lien to be made good at point of sale. I really liked the idea, but it didn't have much legs politically.

316: I should check those out when I get up there.

City fuckers in Sacramento do a pretty good job repairing sidewalks and billing you after. I just got hit for $2,300.

To the extent that the banks show any mercy, it will be of the loan-shark variety: offers to restructure the credits with a longer maturity and higher coupon, and more restrictive covenenants that will permit them to sweep the state's tax receipts before they even get credited to the general fund.

I didn't say the banks would show mercy, I'm not that naive. Just saying it's not a plus to be actually involved in doing sweeps to get their money, don't want the publicity of being in the middle of an ongoing implosion. At least that's what some told me.

Donald Stroup (High Cost of Free Parking) once proposed requiring sidewalks to be repaired at point of sale of property, with the option to get your sidewalk repaired at any point in your tenancy by a city crew, with the bill arriving as a lien to be made good at point of sale. I really liked the idea, but it didn't have much legs politically.

Wait, what? That IS the law in the place where I grew up, and it was totally accepted. Nuisance, but just like having to have smoke detectors in your house, there was no way the sale could go through unless it was done.

In other news, it's good to see so much substantive information (and opinion) on the CA situation, about which I am embarrassingly ignorant. About all I've heard is a number of anti-Mexican (anti-immigrant, anti-brown-people) comments. Not very informative about anything other than the speaker's prejudices.

Um, just to clarify 322, it's not that there's a city crew that repairs the sidewalks, it's that it's the seller's responsibility and MUST be done before the house can be sold.

I grew up literally where the sidewalk ended in my midwestern city. You could walk my block but connect to no other sidewalk. However, in the one direction it was just a short block to where there were basically continuous sidewalks all the way downtown*. In the other direction, there were almost no sidewalks, even though there was a mile or so of comparably dense development to the city limits. It roughly (but not completely) correlated with the time period when the areas were developed, with late '50s/early '60s being the cutoff.

*Except for the very poorest and very wealthiest older sections of town, both of which tended to not have sidewalks.

322: I did not know that was commonplace elsewhere. The result in L.A. is a miniscule budget item for sidewalk repair, resulting in an 80-year backlog. A program jumped sidewalks to the front of the line if the property owner paid half the cost. I don't know if it's still funded.

I love to hear about point-of-sale requirements being the norm. We're pushing one for water conserving appliances. Realtors are telling us that people will EXPLODE from the additional burden at a very trying time in their lives.

298, 324: My experience in Houston was that late 50s/early 60s was also about the standard for when sidewalk construction stopped for bog standard middle-class developments. But of course a much, much greater percentage of the development happened after that compared to my hometown. And this is true for most of Texas.

291, 294: I have also seen plenty of deer in Pittsburgh (including off Forward Ave.), but I haven't seen or heard of a bear (leaving aside lifestyle choices) in the city.

Also, this is a fucking storm we got going. Should I be on the computer? We lost power, but only for about a half hour.

Fuck. Hail.

279: I"ve just caught up with that. dday actually says:

Now, I do think the government should consider offering loan guarantees, to stop the gouging of California going on from Wall Street. But unlike Digby, I do not think that California progressives should WANT a "bailout" in the more traditional sense.

So he isn't quite opposing loan guarantees, which seem to be what people are talking about in this thread.

Hail stopped.

328: but I haven't seen or heard of a bear

Can't find an article, but as I recall there was one that got over into the Nine Mile Run watershed (stream on the far side of Frick Park that flows into the Mon) a few years back. The annual "Bear Harvest" figures show increasing numbers of kills in the counties just north and east of Allegheny. The naturalist at my local Audobon place claims there is at least one that can be found just north of the Dorseyville area, which is about 10 miles NE of the city.

332: I hadn't heard that (about Nine Mile Run), but I've only been here six years or so. I know they are close to the city.

He's not really a stay-at-home-dad.

Have you tried one of those invisible fences?

334: No, but when he gets pee on the toilet seat, she wacks his behind with a rolled up newspaper and rubs his nose in the urine.